Nokia Reportedly Loses CTO as Development of First WP7 Smartphone Assigned to U.S. Team

The chief technology officer (CTO) of Nokia Corp. has taken a leave of absence due to personal reasons and will most likely not return to the company due to major disagreements about the directions of the company. In a separate news, it transpired that the chief executive Stephen Elop re-assigned development of the company's first Windows Phone 7-based smartphone to the company's U.S. team.

No CTO - No Common Architecture?

Rich Green, the senior vice president and the chief technology officer of the world's No. 1 maker of smartphones, recently took the leave of absence due to, according to Nokia, personal reasons. No more official details, as it usually happens in such cases, have been released, but Helsingin Sanomat, one of the most influential news-papers in Finland, reported on Wednesday that Mr. Green would remain absent at least until the end of the year, and would most likely not return to Nokia due to to fundamental differences of opinion over the company’s strategy. Apparently, Mr. Green heavily disagreed Nokia's decision to abandon the development of MeeGo operating system that Nokia used to co-develop with Intel Corp.

The CTO only took position at Nokia in May, 2010, and his responsibility was to drive "common technology architecture across Nokia". While Nokia's mobile phones - simplistic and smart - use different operating systems, they do share a lot of things, including basics of hardware and so on. With the company's intentions to migrate smartphones to Windows Phone 7 operating system (which requires different hardware than Nokia's Symbian), it is clear that there will hardly be a lot in common between Nokia feature phones and smartphones. By contrast, MeeGo could have been tailored for smartphones, feature phones, tablets, netbooks and other devices.

The leave of absence of the CTO and the lack of any official data, who will take his responsibilities, it seems that Nokia will lack its CTO for the next six month. This does not mean that all the works will stall, but it means that nobody will determine exact directions where to go or make critical decisions.

Made in U.S.A.?

But besides slashing works on perspective MeeGo operating system (which is suitable for tablets, an exploding market), chief executive Stephen Elop, an ex-Microsoft Corp. executive that came to Nokia back in September '10, assigned development of the company's first Windows Phone 7-based smartphone to the company's U.S.-based team. He motivated the decision with the fact that the company needed to get back its market share in North America, where Symbian is not considered competitive.

"Our very first Windows Phone products are being designed and put together here, in California, with the U.S. market very much in mind," said Stephen Elop, the CEO of Nokia, in an interview with CNBC.

Even though development in a U.S. facility does not mean that the smartphones will be good or bad, one has to observe that the phones developed in Finland have actually been winning the hearts of consumers around the world for well over a decade now. In fact, even in the U.S. Samsung holds the top position among handset makers. Moreover, Windows Phone 7 has so far proved to be so uncompetitive that even after Mr. Elop's bold announcement to adopt the market's least popular platform [onto the world's most popular phones] in February, not only Nokia Symbian-based phones continued to outsell WP7 devices, but even, according to Tomi Ahonen (a former high-ranking Nokia executive), but Japanese manufacturers of Symbian-based phones (where Symbian is not considered uncompetitive) managed to sell more devices than all WP7 vendors combined. Considering the fact that Nokia will have to compete against loads of formidable rivals with its Windows Phone devices, assembling them in the U.S. (which means higher production costs) seems to be a strange move.

But while the actions of Mr. Elop seem to be somewhat outlandish for Nokia, according to some reports, sales of Nokia's current handsets have stalled in many regions for many different reasons, including the fact that many operators are not satisfied with the company. In case the current executive team will not be able to address the ongoing issues within several weeks from now, the world may never see a Nokia-branded Windows Phone device at all.